Finding the home of your dreams isn’t as simple as you might think. It takes time, dedication, and a willingness to see past potential flaws and issues.
While finding your ideal home is challenging in and of itself, the mortgage process is often much harder. With the median home price in the US coming to almost $226,800, nearly every buyer will need to apply for a mortgage loan if they want to make a fair offer.
So, how long does it take to get a mortgage loan in the first place?
Unfortunately, the answer isn’t simple. Here’s what you need to know about the mortgage loan timeline.
Pre-Qualifications Are Nearly Instant
One of the first things you should do when you start looking for homes is to get pre-qualified for a mortgage. This process is as simple as entering your most basic financial information into your preferred lender’s website.
The system then generates a rough estimate of what you’d be able to borrow from that lender in a matter of minutes.
Once you’re pre-qualified, your lender will give you a pre-qualification letter that you can give to your real estate agent. This helps them narrow down the types of listings they show you and makes it easier for them to understand your budget.
Keep in mind that pre-qualifications are not set in stone. They’re designed to give you a general idea of the types of homes and price range you can afford to look at.
You can also get adjustable-rate mortgage loans by following the credit union mortgage loan rules and options, which can lower your monthly payment.
Pre-Approvals Take Longer
The pre-approval process is where you find out how much you’ll really be able to borrow from your lender. This happens after you provide them with a completed application and they have a chance to review all of your information.
Depending on the lender, this can take anywhere from a few days to a few months.
It all comes down to your financial situation and how many other applications the lenders are having to process at that time. The busier they are, the longer it will take for them to reach a decision on your loan.
However, once you get pre-approved for your mortgage loan, you’ll be able to make qualified offers on properties that you’re interested in.
What Can Slow the Process Down
Every mortgage loan timeline is unique. Some applications are easy to process and borrowers will get decisions in a matter of days. Others can take weeks or even months before lenders are able to reach a decision.
That said, there are a few things that can slow the process down further.
Lack of the Necessary Documents
Every loan application requires detailed information about your finances. Most lenders expect you to provide current pay stubs, tax returns, bank statements, and supporting documents that prove your income level.
If you don’t have those documents on hand, you’ll need to find them and send them to your lender before they can process your application. The longer it takes you to track that information down, the longer the timeline for your mortgage loan will be.
Incorrect Information on Applications
Errors happen when you’re filling out tons of paperwork at once. Unfortunately, even minor errors can create delays in your mortgage application.
The lender won’t know what’s incorrect until they start reviewing your application. Once they identify the errors, they won’t be able to proceed until you correct the issues and send them the right information.
According to JakeTaylor.com, it’s always a good idea to shop around for mortgage lenders. This gives you a chance to compare loan terms and interest rates so you can choose the loan that best fits your needs and budget.
However, the more you shop around, the longer it will take for lenders to reach a decision regarding your application.
Remember, you can only move forward with one lender. The more quotes you get and the longer you take to review them, the longer it will take for you to get a mortgage loan.
Confusing Activity on Your Bank Account
When you apply for a mortgage, lenders want your finances to appear stable. They’ll ask you for copies of your bank statements and will review those statements carefully.
If you have large deposits or withdrawals showing up on those statements, lenders may ask you to explain what happened. You’ll have to write a detailed letter explaining each large or confusing deposit or withdrawal and submit that to your lender before they can move forward.
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What You Can Do to Speed Things Up
Though getting a mortgage loan takes time no matter what lender you work with, there are a few things you can do to speed up the process.
The best thing you can do is to start looking for lenders as soon as you decide to buy a house. Once you have a few lenders in mind, gather the necessary documents together and fill out the applications carefully.
Double-check everything you enter for accuracy to reduce the risk of errors and unnecessary delays. If lenders reach out to you requesting additional documentation or information, get back to them as quickly as you can. The sooner you respond, the sooner they can start reviewing your mortgage application and render a decision.
You may also find it helpful to work with a dedicated mortgage broker in your area. Brokers are mortgage loan experts and can help you with everything from filling out the application to comparing loan terms.
So, How Long Does It Take to Get a Mortgage Loan?
Have you been asking yourself “how long does it take to get a mortgage loan?” Unfortunately, the answer isn’t as cut and dry as you might think. It depends on your application, your finances, and your personal situation.
That said, if you stay on top of things and start applying for loans as soon as you make the decision to buy a house, you’ll get a decision fairly quickly. Just make sure to thoroughly review every quote you receive. The last thing you want to do is choose a mortgage loan that you can’t afford in the long run.
For more tips and tricks to make buying a house easy, check out our latest posts.